Buying your first home as a couple is exciting, but it’s also a little intimidating. The process of purchasing a house is complex, and it’s especially daunting for those who don’t have experience. Plus, while your realtor is there to support you, there’s a chance they aren’t being open about everything. With that in mind, here are six house hunting tips for newlyweds that realtors don’t always tell you.
1. Working with the Seller’s Agent Is Risky
When newlyweds find a house that interests them and they don’t currently have their own agent, they might assume that working with the seller’s representative is the best option since that realtor is already connected to the property. However, this creates a conflict of interest. The realtor isn’t necessarily concerned with getting the buyer the best deal. Instead, their focus is usually on securing the highest price for the seller, instead.
Even if the seller’s agent is reputable, it’s best to get a separate agent as the buyer. That ensures your realtor is focused solely on your best interest, eliminating any potential conflict regarding also directly supporting the seller.
2. You Don’t Have to Give Earnest Money to the Realtor’s Office
Earnest money is functionally a deposit that proves a buyer is serious about their offer on the home. Additionally, it serves as compensation to the seller if a buyer backs out even if all of the buyer’s conditions are met.
When earnest money is required, many realtors tell buyers to write the check to their real estate company to have it held in escrow. While that is an option, buyers can go another route instead, allowing them to select a neutral party that’s not as directly involved in the deal. For example, title companies can hold earnest money in escrow. An attorney’s office that is handling the closing can also usually safeguard earnest money.
By going with one of the more neutral parties, it’s typically easier to get your earnest money back if the deal falls through for a legitimate reason. Additionally, it limits the need for the earnest money to be transferred from the realtor’s company to the closing agency, which could speed up part of the process.
3. Commissions Are Negotiable
Many newlyweds who are buying their first home assume that any agent commissions are set in stone. In reality, these fees are negotiable.
While it may seem like buyers shouldn’t worry about their realtor’s fee, as they don’t pay it directly, negotiating is still wise. Lowering the commission could mean having more funds for a larger down payment or the ability to cover more of the closing costs upfront.
Technically, there are risks to negotiating the fee down, as your agent may prioritize clients who are paying a higher rate over those that aren’t. However, for low-maintenance buyers, those purchasing a higher-priced home, or when there aren’t as many buyers in the market, it’s an option worth exploring.
4. Finding Your Own Inspector Is Best
Many real estate agents will present buyers with a list of inspectors for the home inspection part of the buying process. While they may be reputable, it’s always best to do your own research and select one on your own. Inspectors could be excluded from the agent’s list for a variety of reasons, including frequently identifying issues with properties that may cause a sale to fall through. Ultimately, you want an inspector who’s going to be thorough and provide an accurate report regarding issues, as that’s in your best interest.
An inspector that will be forthright about what they see keeps you well informed. Even if the results mean you’ll stop pursuing the house due to what they found or have enough leverage to secure a much lower price, the inspector made sure that you’re going in with your eyes open. Ultimately, that’s what matters, so find an inspector that will do just that.
5. The In-House Lender Isn’t Always Competitive
Some real estate agencies have an in-house lender, which is essentially a mortgage company with an office within the real estate company’s office. Often, these are marketed as convenient options for aspiring buyers, regardless of whether the buyer has already secured financing elsewhere.
In many cases, realtors have little choice but to try and refer buyers to these in-house lenders, as not doing so could lead to penalties. Additionally, many earn bonuses if a buyer uses that mortgage provider, essentially incentivizing them to talk buyers into going that route.
The trick is that many people who turn to in-house lenders don’t always get quotes from other mortgage companies, as they assume the recommendation wouldn’t occur unless the in-house option is competitive. However, the competitiveness of the loan isn’t guaranteed, and some may not be particularly good deals. The person processing the applications may also have little incentive to get you the best possible loan, as sourcing applicants to replace you isn’t typically an issue.
6. Sellers Can Disguise How Long They’ve Tried to Sell a House
In many cases, buyers respond negatively to a home that’s been on the market for an extended period. Usually, it’s because they assume there’s an issue with the property. Otherwise, if there wasn’t a problem, they think it would have sold.
The thing is that there are steps sellers can take to functionally reset the timer presented on many listing websites. All they need to do is remove the house from the market for 30 days. Then, they can relist with the timer refreshed. Plus, that strategy hides any previous price drops, making it harder for buyers to get a realistic view of what occurred with the home during the recent sale attempts.
While there isn’t necessarily anything a buyer can do about this issue, it’s critical to know that it happens. That allows newlyweds to understand how a listing appears and the reality of its history on the market may differ, making it easier to remain realistic along the way.
Do you know of any other house-hunting tips newlyweds should know about before trying to find their dream home? Did you use any of the tips above and want to tell others about your experience? Share your thoughts in the comments below.
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